The Rogak Report: 05 October 2004 ** No Fault - EUO No Shows **
- DENIAL OF NO-FAULT CLAIM BASED ON EUO NO-SHOW IS VALID FOR CLAIMS
FILED AFTER 4/05/02 EVEN IF ACCIDENT OCCURRED PRIOR TO THAT DATE
Ocean Diagnostic Imaging P.C. v. State Farm Mutual Automobile
Insurance Co., NYLJ 10/04/04 (Civil Court, Kings County) (Nadelson,
Plaintiff, a medical provider No-Fault benefits, moved for summary
judgment based on defendant-insurer's failure to pay or deny
plaintiff's claim within the statutory 30 day period following
submission of the claim.
The insurer opposed the motion for summary judgment based on EUO no-
shows by the assignor. The insurer also alleged that the loss is not
a covered loss because the accident was staged, thereby rendering
Plaintiff's assignor a non-eligible party.
Plaintiff asserted that the EUO no-show is not a valid basis for
denial because the statute authorizing such basis did not go into
effect until after the incident in question. Further, Plaintiff
maintains that any accusation of fraud with respect to the claim made
by Defendant has been made against the other individuals involved in
the incident but not against its assignor.
The insurance policy in question was issued by defendant on March 3,
2002. The accident occurred on March 20, 2002. Plaintiff's claim was
received by defendant on May 16, 2002. After submission of the claim
defendant requested an examination under oath of Plaintiff's
assignor. Plaintiff's assignor failed to appear and a second EUO was
scheduled, which she also did not attend. On December 13, 2002,
Defendant issued its denial of benefits to Plaintiff.
The effective date of the new no-fault regulation is April 5, 2002,
and these new regulations provide the authority for an insurer to
deny first party benefits to medical providers whose assignors fail
to attend EUOs.
Plaintiff's argument rested on the fact that the effective date of
the regulation was subsequent to the date of the accident and
therefore is inapplicable to this case. In support of this
contention, Plaintiff relied on Bronx Medical Services, P.C. a/a/o
Gladys Rivera v. Lumbermans Mutual Casualty Co., 2003 NY Slip Op
51022U, 2003 N.Y. Misc. LEXIS 777 (1st Dept. 2003), which states
that "the revised regulations cannot be applied retroactively to
cover plaintiff's September 2000 no-fault claim." However, held the
Court, "The facts in this cited decision are clearly distinguishable
from the case at bar" because in Bronx Medical, only the insurance
policy, and not any statute, required EUOs. The new no-fault regs
were not enacted until after the accident in that case, and the Court
in that case refused to apply the new regs -- which were in effect by
the time the lawsuit was commenced -- retroactive effect.
"In the instant case, the regulation applies to the insurance policy
issued by Defendant in March of 2002. The only question to be decided
by this court is whether the regulation applies to claims filed after
its effective date relating to accidents occurring before its
Regulation 68-A does not apply retroactively to claims filed before
its effective date, held the Court. "By contrast, the claim for
benefits in the instant case was filed more than a month after the
regulation came into effect, and the insurance policy upon which the
claim is based is subject to the regulation because it was issued and
effective after September 1, 2001. Therefore, the court holds that
Regulation 68-A applies to claims filed after its effective date and,
consequently, the court denies Plaintiff's motion for summary
Turning to the other issue, the court held that "Defendant's argument
that Plaintiff's assignor is not a covered person because of alleged
fraud to be without merit.... Defendant has failed to provide any
evidence of fraud with respect to Plaintiff's assignor. All
assertions of fraud are made against the other parties to the
incident, and therefore are not relevant to the assignor in question."
Comment: This is a decision of significant impact for no-fault
insurers. Remember the rule: if the claim is filed after 4/05/02,
the insurer can deny the claim based on EUO no-show, even if the
accident occurred before 4/05/02.